The Audit Committee Imposes Fines and Refers MuPyeong Industry and Daeju ENT to Prosecutors for 'Accounting Standards' Violations

[Asia Economy Reporter Lee Jung-yoon] The Securities and Futures Commission under the Financial Services Commission resolved on the 26th to impose fines and notify the prosecution for two companies, Mu-pyeong Industrial and Daeju ENT, which violated accounting standards.

According to the Securities and Futures Commission, the unlisted company Mu-pyeong Industrial was found to have falsely recorded inventory and other assets to inflate the sales and operating profit of its affiliates in order to avoid being designated as a management item. The commission decided on fines, an 11-month restriction on securities issuance, and a 3-year auditor designation. Additionally, it recommended the dismissal of the CEO, a 6-month suspension of duties, and took measures to report and notify the prosecution.

Daeju ENT, a KONEX-listed company, overstated construction revenue and construction receivables, falsely increasing net income and equity capital. It was also found to have overstated bad debt expenses. Accordingly, the commission imposed fines and a 2-year auditor designation. It also recommended the dismissal of the responsible executive and decided to notify the prosecution.

Furthermore, for the auditor Samdeok Accounting Corporation, the commission imposed fines, an additional 50% contribution to the joint compensation fund, and a 3-year restriction on audit work related to Daeju ENT.

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